Should you buy Super Micro Computer ($SMCI) stock?
Super Micro Computer, Inc. (SMCI) has been a notable performer in the stock market during 2024, showcasing significant volatility and growth. We’ve featured the stock several times on the Turbo Option Trading platform during it’s ups and downs, the volatility has been juicy to say the least my dear traders.
As of mid-June, SMCI’s stock price has seen a nice 5.08% increase, with a current price of $887.41, marking a notable rise from its previous close. In this video we go over some technical analysis for bulls looking for an entry.
The company’s performance in 2024 has been underpinned by robust financial growth, with its Q3 revenue tripling year over year to $3.85 billion. Bullish traders have seen their deal with Nvidia to be reason enough to bet on this company and the early birds got the worm this time as those bets paid massively.
This impressive top-line growth has been supported by the company’s focus on AI server solutions, which have seen increased demand due to the expansion of AI applications across various industries. Super Micro Computer’s updated fiscal 2024 revenue guidance suggests a potential doubling from the previous fiscal year, setting a positive outlook for the company’s financial trajectory. If the AI themed bull run continues SMCI has potential to continue being a benefactor.
Investment decisions in SMCI stock should be made after careful consideration of both the potential rewards and risks. Analysts have provided a moderate buy consensus rating, with a price target suggesting a 13.01% upside. The company’s stock is trading at a price-to-sales ratio lower than the U.S. technology sector’s average, indicating that it may be undervalued. Furthermore, Super Micro’s alliances and advancements in liquid cooling technology position it as a leader in the AI space, potentially offering more room for growth.
On the other hand, some analysts have expressed caution, highlighting the competitive nature of the server and storage market and the risks associated with forward earnings growth. The stock’s rapid increase in price also raises questions about sustainability and the potential for future corrections. Besides, despite it’s strong association with AI technology and business in it’s infrastructure, Super Micro Computer is not an actual AI company.
SMCI stock has shown impressive growth and holds promise due to its strategic positioning in the AI sector, investors should weigh the potential risks and conduct thorough research before making investment decisions. The company’s strong performance in 2024 and positive financial outlook present a compelling case for investment, but it is essential to consider the broader market dynamics and individual investment goals.
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